Asia marts move higher, Japanese stocks up 4.9%
Asia marts move higher, Japanese stocks up 4.9%
SINGAPORE (Reuters): Japanese stocks surged 4.90 percent and
other Asian stocks also moved higher on Monday as investors took
their cue from Wall Street and went bottom fishing for bombed-out
tech stocks.
In the short run, analysts said there was more scope for U.S.
stocks to gain further and that should underpin a bounce in Asian
markets as well.
"Short-term call:put ratio (in U.S. stocks) suggests U.S.
market is oversold. Hence, it probably doesn't make sense to be
aggressive sellers at this stage," said a report by Merrill
Lynch.
"Given, the importance of US leadership to global stock
markets, this is likely to be a useful indicator for emerging
markets," it said.
The U.S. call:put option ratio is based on the volume of call
options on individual U.S. equities purchased each week in
relation to put options. A low ratio implied a significant degree
of pessimism about the market which is a potential contrarian buy
signal.
But over the longer term, analysts expected the market to hit
several speed bumps in the form of bad economic indicators and
corporate profit warnings before the worst is over.
Hefty gains in Japan's largest chip maker Toshiba Corp and
other high-tech shares led the benchmark Nikkei 225 to close
647.77 points or 4.90 percent higher at 13,862.31.
The Nikkei has surged 21.2 percent since it touched a 16-year
intraday low of 11,433.88 on March 15, while the capital-weighted
TOPIX is now 18.90 percent above a two-year trough of 1,125.40
hit on the same day.
Korean stocks finished at a two-week high as Samsung Electro-
Mechanics and other tech stocks rallied on the back of gains in
U.S. counters.
Expectations that global PC makers would build up chip
inventories as they ran out of stocks also boosted sentiment.
The KOSPI finished up 1.49 percent at 545.98 while the Kosdaq
over-the-counter market rose 3.06 percent to close at 72.77, up
2.16 points.
Hong Kong stocks also racked up gains, bolstered by the strong
performance of China Mobile, China's largest mobile phone
company. The Hang Seng Index ended up 2.92 percent at 12,950.49.
In Singapore, the market was hit by worries that Singapore
Telecommunications was overpaying for a deal to buy Australia's
Cable & Wireless Optus
SingTel said on Monday it would acquire Optus for up to A$17.2
billion (US$8.4 billion) or A$4.57 per share in cash and scrip to
create Asia's leading wireless carrier.
The offer value is about 14.5 percent higher than the value of
Optus at Friday's close of A$3.99 per share.
But analysts expected the setback to be temporary as the deal
should bode well for SingTel in the long run.
"This is a major transformation of a company which is
traditionally seen as cash-rich, very secure and to some extent a
safe proxy for the Singapore market," said Dominic Armstrong,
head of research for Singapore and Malaysia at ABN AMRO.
"Now it is transformed into an internationally-geared telecom
business. Its financial profile is now different and therefore it
is going to bear a brunt on that security. It's a short-term
price for that kind of transformation," he said.